Before deciding who to tell, and how much to tell them, talk to your attorney and get his or her advice. People who may need to be informed could include the board, staff, key volunteers, and donors. Volunteers and donors will most likely need to be informed if any publicity could potentially arise from the lawsuit. It is better for these individuals to hear of the situation from an official source in your organization than through a news report. A statement to these stakeholders should express concern and compassion for anyone who has been injured, without admitting liability, and it should reaffirm a commitment to the organization's mission.
If the person who has filed the lawsuit is someone with whom your nonprofit hopes to continue to have a relationship, do not take punitive actions against them. For example, if you are being sued by a client who regularly uses your services, continue to provide those services. If the plaintiff is a current employee, make every effort not to treat them adversely. Burning bridges will not help your case, and will only create more negative feelings.